United States v. Burke

United States District Court, D. Connecticut

June 28, 2017

UNITED STATES OF AMERICAv.TIMOTHY BURKE

RULING ON MOTION FOR RESTITUTION

Michael P. Shea, U.S.D.J.

The
government moves for restitution for Defendant Timothy
Burke's victims in the amounts listed in Amended Exhibit
3/Amended Sealed Exhibit 38. (ECF No. 173.) The defendant
objects to the inclusion of A.M. and D.P. in the list of
victims. Burke argues that these two individuals are not
“victims” within the meaning of 18 U.S.C. §
3663A. For the reasons stated below, the motion for
restitution is GRANTED in part and DENIED in part. It is
GRANTED for all listed victims except for A.M. and D.P.-the
motion for their restitution in the amount of $84, 853.84 is
DENIED.

I.
Background

On
January 24, 2017, Burke pled guilty to Count Two of the
second superseding indictment, charging him with mail fraud
in violation of 18 U.S.C. § 1341 and Count Nine of the
second superseding indictment, charging him with tax evasion
in violation of 26 U.S.C. § 7201. Burke's scheme
involved (1) “enrich[ing] himself by identifying real
properties that were in financial distress and/or in
foreclosure proceedings”, (2) “convinc[ing]
victim homeowners to give Burke physical control of their
properties by falsely representing to them that [he] was
purchasing their properties, would take over their mortgage
and interest payments, and would pay the taxes associated
with the properties, ” and (3) “advertis[ing] and
rent[ing] out the properties that he fraudulently obtained to
make rental income but not pay the homeowner victims'
mortgage and interest payments and taxes.” (ECF No. 79
¶¶ 8-10.)

At
Burke's sentencing, A.M. addressed the court. She
described how Burke had injured her and her husband by
renting their house, through a limited liability company, but
then chronically failing to make rent payments, subleasing
rooms in the house to unknown tenants without A.M.'s or
D.P.'s permission, failing to ensure that their property
was cared for, making bankruptcy filings to frustrate their
efforts to evict him, and leaving unauthorized tenants in the
house at the time of his arrest.

After
sentencing, the government gathered additional documentation
to support A.M.'s claims and asked the Court to add A.M.
and D.P. as victims owed restitution. Burke objected, arguing
that A.M. and D.P. are not victims within the meaning of the
applicable restitution statute.

II.
Discussion

The
Mandatory Victim Restitution Act, 18 U.S.C. § 3663A(a),
which the parties agree applies here, defines a
“victim” as “a person directly and
proximately harmed as a result of the commission of an
offense for which restitution may be ordered, including in
the case of an offense that involves as an element a scheme,
conspiracy, or pattern of criminal activity, any person
directly harmed by the defendant's criminal conduct in
the course of the scheme, conspiracy, or pattern.” The
Second Circuit has held that this definition “reflects
an important limiting principle for restitution
awards-namely, that Congress has ‘authorize[d] an award
of restitution only for the loss caused by the specific
conduct that is the basis of the offense of
conviction.'” U.S. v. Vilar, 729 F.3d 62,
97 (2d Cir. 2013) (citing Hughey v. U.S., 495 U.S.
411, 413 (1990)). “[R]estitution is not permitted for
loss caused by ‘relevant conduct' even though such
conduct may be properly included in offense level calculation
under the Sentencing Guidelines.” Id.
(internal citations omitted).

The
scheme alleged in the second superseding indictment did not
include delinquency in rental payment. Instead, the scheme
involved Burke falsely representing to owners of distressed
properties that he would take title and pay the mortgage,
interest, and taxes of their properties, while in fact
renting them out for his own profit. (ECF #79.) The
government notes that Burke did sublet A.M. and D.P.'s
property and retain that income-much like he subleased other
victims' property. But with A.M. and D.P., Burke made no
false representation that he was purchasing their house-the
core ingredient of the scheme. Although Burke's actions
against A.M. and D.P. may be relevant conduct for the
purposes of the offense level calculation and although Burke
substantially injured A.M. and D.P., the injury he caused
them was not “in the course of the scheme, conspiracy,
or pattern” alleged in the second superseding
indictment. 18 U.S.C. § 3663A(a).

A.M.
and D.P. also are not “victims” even though Burke
used an entity mentioned in the second superseding indictment
to sign the lease. The government concedes that A.M. and D.P.
are not “homeowner or tenant victims as the Court has
seen and heard from.” (ECF No. 173.) But it then argues
that § 3663A's definition of “victim”
can apply because Burke “us[ed] a lease agreement in
the name of a corporate entity identified in the second
superseding indictment, Quality Asset Management Services
LLC” when he rented A.M. and D.P.'s property.
Id. By itself, Burke's use of an entity also
involved in the charged scheme does not make his failure to
pay rent-and other activities as a difficult tenant-part of
the same “scheme, conspiracy, or pattern.”

III.
Conclusion

For the
reasons stated above, the Motion for Restitution is GRANTED
in part and DENIED in part. The restitution amounts for all
victims listed in Amended Exhibit #3/Amended Sealed Exhibit
#38 are GRANTED, with the exception of the $84, 853.84
requested for A.M. ...

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